GBTVK - Granite Broadcasting Corporation Receives Commitments for New $205 Million
Senior Credit Facility and Announces Modification of NBC Payment Schedule -
Secondary Affiliation for KNTV to Commence Immediately -
NEW YORK, Mar 5, 2001 /PRNewswire via COMTEX/ -- Granite Broadcasting (Nasdaq:
GBTVK) announced today that it has received commitments for a new $205 million
senior credit facility led by Goldman, Sachs & Co. Proceeds will be used in part
to repay in full existing senior bank debt of approximately $114 million. The
remaining proceeds of approximately $91 million, combined with other cash
generated by the Company, will provide the necessary resources to finance a
transition period during which Granite will continue to prepare KNTV to become
the San Francisco NBC affiliate on January 1, 2002 and develop its two top-ten
market WB stations. The new credit facility, which will mature on December 31,
2003, is expected to close on or about Tuesday, March 6, 2001.
In addition, Granite announced today that upon closing the new senior credit
facility, NBC and Granite will modify the payment terms associated with
Granite's acquisition of the NBC affiliation for the San Francisco-Oakland-San
Jose television market. Under the original agreement Granite was to make a
payment of $61 million on January 1, 2002. Now Granite will pay $30.5 million at
a discount upon closing the new credit facility. The remaining $30.5 million
payment is now due on January 1, 2005, after KNTV has completed its third year
as the NBC affiliate for the Bay Area. After giving effect to these and related
changes, the present value of the new payment schedule is substantially
unchanged from the original terms.
Also, Granite and NBC have commenced a new secondary affiliation for KNTV.
Effective immediately, KNTV will gain first rights on in-market "pre-empted"
programming and other non-network programs. Branding rights will enable
identification of KNTV as NBC3 and KNTV NBC News as soon as possible. Interim
consultation services from NBC will assist and promote the station during the
transition.
"The successful completion of this financing provides us with ample funding to
meet our needs through 2003", said Don Cornwell, Granite's Chief Executive
Officer. "The facility, coupled with the change in payment terms of our San
Francisco NBC affiliation agreement, provides Granite with the financial
flexibility and resources we need to execute our business plan and prepare KNTV
to become the San Francisco NBC affiliate on January 1, 2002. At the closing of
our new credit facility we will prepay the first installment to NBC and benefit
from a time value of money discount. No additional payment to NBC will be
required until 2003."
"We are now fully funded to transition through a period with abnormally high
credit ratios resulting primarily from the cost of transforming KNTV and
developing our two top-ten market WB stations. As the NBC affiliate exclusively
serving the 5th largest television market, KNTV will garner significantly higher
ratings and will be able to compete for the roughly $700 million of television
advertising dollars spent annually in San Francisco. We expect revenue and
broadcast cash flow generated by KNTV and Granite to increase substantially once
KNTV becomes the NBC affiliate. As a result, we expect our ratio of total debt
to EBITDA to decline to less than five times during 2002, which will greatly
enhance our prospects for refinancing our balance sheet."
"In the year since Granite and NBC announced our strategic partnership in the
Bay Area, we have assembled a seasoned and respected sales, news and management
team and we have secured cable distribution on channel 3 throughout the Bay
Area. There are just over 300 days before KNTV becomes the NBC affiliate. The
new secondary affiliation serves as a head start to the formal launch and
signifies NBC's commitment to make the transition a success. Our focus will now
turn to branding the station as NBC3 as soon as possible. Both Granite and NBC
are very enthusiastic about our relationship and the affiliation switch will
proceed as planned on January 1, 2002."
This press release contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, which represent the
Company's expectations or beliefs concerning future events. The Company cautions
that these statements are further qualified by important factors that could
cause actual results to differ materially from those in the forward looking
statements. Such factors include, without limitation, general economic
conditions, competition in the markets in which the Company's stations are
located, technological change and innovation in the broadcasting industry and
proposed legislation. Consequently, all forward-looking statements made herein
are qualified by these cautionary statements and the cautionary language set
forth in the Company's most recent Form 10Q report and other documents filed
with the Securities and Exchange Commission. There can be no assurance that the
actual results, events or developments referenced herein will occur or be
realized. The Company assumes no obligation to update these forward-looking
statements to reflect actual results, changes in assumptions or changes in
factors affecting such forward-looking statements.
Granite Broadcasting Corporation (Nasdaq: GBTVK) operates nine television
stations in geographically diverse markets reaching almost 7.0% of the nation's
television households, including a duopoly in the fifth largest market. Three
stations are affiliated with the NBC Television Network (NBC), two with the ABC
Television Network (ABC), one with the CBS Television Network (CBS), two with
the Warner Brothers Network (WB) and one Independent station. The NBC affiliates
are KSEE-TV, Fresno-Visalia, California; WEEK-TV, Peoria-Bloomington, Illinois;
and KBJR-TV, Duluth, Minnesota and Superior, Wisconsin. The ABC affiliates are
WKBW-TV, Buffalo, New York, and WPTA-TV, Fort Wayne, Indiana. The CBS affiliate
is WTVH-TV, Syracuse, New York. The WB affiliates are KBWB-TV, San
Francisco-Oakland-San Jose, California, and WDWB- TV, Detroit, Michigan. The
independent station is KNTV, San Francisco-Oakland-San Jose, California. KNTV,
which is operated in combination with KBWB-TV, became a news-oriented
independent station as of July 3, 2000. On June 1, 2000, Granite and NBC signed
definitive agreements, whereby KNTV will become the San Francisco-Oakland-San
Jose, California NBC affiliate as of January 1, 2002. KNTV was assigned by the
Nielsen Media Research service to the San Francisco-Oakland-San Jose DMA as of
September 1, 2000. Granite is also recognized as an innovator in the development
of new media services that combine television broadcasting and Internet
platforms.
SOURCE Granite Broadcasting Corporation
CONTACT: Press - W. Don Cornwell, 212-826-2530, or Analysts - Ellen
McClain, 212-826-2530, both for Granite Broadcasting
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